"People Are Selling The Crap Out Of The Euro In Every Way Possible"


That huge “career trade” Euro-short that everyone was talking about last year is back with a vengeance, and anyone who didn’t get in then is getting in now.This is “real disaster insurance,” a London-based hedge-fund trader told the WSJ. “People are selling the crap out of the euro in every way possible.”

Why is pretty obvious: Greece, Spain, ECB rate hikes… (Click here to read Morgan Stanley’s take; Here’s Paul Krugman’s.)

Here are some examples of huge Euro short trades, via the Wall Street Journal:

According to a Deutsche Bank note to a client, one “U.S. house” bought a very large amount of one-month euro/dollar put options with a $1.40 strike price on Tuesday and Wednesday.

At Bank of America, brokers saw someone buy a $1 billion put option with a strike price of $1.30 and an end-of-year maturity date.

Another BOA client bought a $500 million put option with a strike price at $1.30, but the option doesn’t kick in unless the euro falls to $1.10. (Such “knock in” features make options cheaper, since the options are less likely to be triggered.)

The Euro doom scenario starts with what’s happening in Spain right now >

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